Angels owner Arte Moreno’s priorities: market share, revenue snaring – LA Times

By Mike DiGiovanna
Los Angeles Times 


Reporting from Tempe, Ariz. – Although some fans and Anaheim city officials still bristle at Arte Moreno’s 2005 decision to call his club the Los Angeles Angels of Anaheim, the Angels owner is convinced the name change has helped fuel his team’s financial fortunes.


In 2002, the year the Angels won the World Series and a year before Moreno bought them, the club drew 2.3 million fans, sold about 14,000 season tickets and generated about $100 million in revenue.


Last season, their fifth as the Los Angeles Angels, they drew 3.24 million fans to surpass the 3-million mark for the seventh straight season, sold about 26,000 season tickets and generated about $230 million in revenue.


“Did it work?” Moreno said Thursday, while Angels pitchers and catchers conducted their first spring-training workout. “To me, it’s a slam dunk.”


Moreno, of course, is subjective. After all, it is difficult to measure how much the name change has contributed to the team’s success.


The Angels are entering the final year of a five-year, $500-million contract with Fox Sports Net that generates an average of $50 million a year for the team, far from the meager $12 million a year the broadcast rights previously averaged.


Yet even four years ago, after Moreno’s move was upheld by a jury and the team was on the verge of its new TV deal, an FSN executive said there was no correlation between the TV package and the Angels’ court victory.


“We’ve always looked at the Angels as a Southern California team and distributed them to the widest possible territory, including Las Vegas and Hawaii,” Randy Freer, FSN’s president, said at the time.


Moreno, though, said the TV deal was only one of the benefits of the name change.


“We had people who thought Los Angeles was Los Angeles, and they wouldn’t buy Anaheim,” Moreno said. “The way we marketed and promoted the team throughout the whole region, the fact that we didn’t make it a small-community team, has helped.”


Winning five of the last six American League West titles and advancing to the AL Championship Series twice during Moreno’s tenure helped too.


So has Moreno’s aggressive approach in the free-agent market, where the Angels have shown a big-market mind-set, luring the likes of Torii Hunter and Vladimir Guerrero with huge contracts and carrying payrolls in excess of $100 million for five consecutive years.


“My job is to make sure we can generate the revenues to build a team that can compete at a high level every year,” Moreno said. “We were two games away [from the World Series] last year.”


Moreno’s reputation as one of baseball’s big spenders took a hit this winter, though. The Angels were outbid for two of their most productive and popular players, pitching ace John Lackey, who signed a five-year, $82.5-million contract with the Boston Red Sox, and third baseman and leadoff batter Chone Figgins, who signed a four-year, $36-million deal with the Seattle Mariners.


The departures, combined with reports that the Angels had lost money for the first time in three years and had laid off several front-office employees, gave some the impression that Moreno was beginning to pinch pennies.


Not so, the owner said. Thanks to revenue generated during the playoffs, the Angels, after paying into baseball’s revenue-sharing program and the club’s debt service, actually cleared a profit that Moreno would not specify but is believed to be in the $2-million range.


The decisions to let Lackey and Figgins walk were based not on dollars, he said, but on age and contract length, concerns about their long-term health and the availability of cheaper but attractive alternatives.


Moreno would not go into detail about those negotiations, but a source familiar with the talks but not authorized to speak publicly said the Angels offered Lackey four years and $60 million and Figgins four years and $32 million.


Lackey, who was 11-8 with a 3.83 earned-run average last season, turned 31 in October and missed the first six weeks of the 2008 and 2009 seasons because of elbow injuries, causing some in the organization to consider him a long-term health risk. In fact, Lackey’s deal with Boston includes a 2015 club option at major league minimum salary if he misses significant time from 2010 to 2014 because of surgery for a preexisting elbow injury.


Figgins, who hit .298 with a .395 on-base percentage and scored 114 runs last season but relies primarily on speed, turned 32 in January, and his deal with the Mariners includes a fifth-year option that vests only after 600 plate appearances in 2014.


“It’s never been about the money. It’s about what Mike and the coaches say, about what Tony and the scouts say,” Moreno said, referring to Manager Mike Scioscia and General Manager Tony Reagins. “Then you look at the team. Are we getting old? And because of this age, what will we have to do?”


The Angels used the money they saved on Lackey and Figgins to sign designated hitter Hideki Matsui (one year, $6 million), pitcher Joel Pineiro (two years, $16 million) and reliever Fernando Rodney (two years, $11 million) and re-sign Bobby Abreu (two years, $19 million). The payroll is about $113 million.


And they are still considered favorites to win the division.


“I bought a business, and I’m investing money into it,” Moreno said. “If I believe it’s the proper investment, I’m going to make it. If I’m not going to get a return, I’m not going to make it.”


February 21, 2010